M.C. Dean, Inc. v. City of Miami Beach
199 F. Supp. 3d 1349
S.D. Fla.2016Background
- M.C. Dean, an electrical subcontractor on the Miami Beach Convention Center project, provided certified payrolls (names, SSNs, addresses, pay rates, hours, etc.) to the prime contractor Clark per contract obligations.
- The prime contract (and municipal wage ordinance) required Clark and its subcontractors to maintain and furnish payroll records to the City and stated such records furnished to the City may be used without restriction.
- Local 349 requested the payrolls under Florida’s public records law; the City initially said it would produce redacted payrolls but a City clerk inadvertently produced unredacted payrolls to Local 349.
- M.C. Dean demanded retrieval and destruction; Local 349 refused. M.C. Dean sued the City and Local 349 for violations of the Defend Trade Secrets Act (DTSA) and Florida Uniform Trade Secrets Act (FUTSA).
- Court reviewed pleadings, the subcontract/prime contract, and ordinances on a Rule 12(b)(6) motion and granted defendants’ motion to dismiss, permitting a single opportunity to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether M.C. Dean alleged it took reasonable measures to protect the payroll information as trade secrets | M.C. Dean alleged confidentiality policies and affidavits showing it treats payrolls as secret and that disclosure would harm its competitive investment in employees | Defendants argued M.C. Dean provided the payrolls to Clark under contracts and ordinance that obligated disclosure to the City and contained no confidentiality protections, so M.C. Dean failed to take reasonable measures | Held: Dismissed — plaintiff failed to plead reasonable steps to maintain secrecy because the subcontract/prime contract and ordinance required disclosure and M.C. Dean did not allege contractual protections limiting use or disclosure |
| Whether M.C. Dean plausibly alleged misappropriation under DTSA/FUTSA | M.C. Dean contended the City (and thus Local 349) knew or should have known the information was to be kept secret and that disclosure resulted from City action | Defendants argued there was no improper acquisition: the records were provided pursuant to contract and public-records rules; no breach, theft, or duty to M.C. Dean was plausibly alleged | Held: Dismissed — no plausible allegation of misappropriation because production was contractually required and not the result of improper means |
Key Cases Cited
- Am. Red Cross v. Palm Beach Blood Bank, 143 F.3d 1407 (11th Cir. 1998) (plaintiff bears burden to show information is secret and reasonable protective measures were taken)
- Sepro Corp. v. Fla. Dep’t of Envtl. Prot., 839 So.2d 781 (Fla. 1st DCA 2003) (documents provided to a public agency without confidentiality marking are not protected trade secrets)
- Cubic Transp. Sys., Inc. v. Miami-Dade Cnty., 899 So.2d 453 (Fla. 3d DCA 2005) (failure to mark documents as confidential when delivered to a public body undermines trade-secret claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (Rule 12(b)(6) plausibility standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state a plausible claim for relief)
- In re Maxxim Med. Grp., Inc., 434 B.R. 660 (Bankr. M.D. Fla. 2010) (disclosure to others without confidentiality obligations defeats trade-secret status)